It’s taken a few weeks for this to sink in: John Battelle’s post on Sell Side Advertisting (inspired by Ross Mayfield’s post on Cost Per Influence).

Ross wrote: “An important facet of this format is the amount of user choice. Users decide what feeds to subscribe to and ads to block. Bloggers should be able to choose what ads to both host and pass through.”

John’s addition:

Instead of advertisers buying either PPC networks or specific publishers/sites, they simply release their ads to the net, perhaps on specified servers where they can easily be found, or on their own sites, and/or through seed buys on one or two exemplar sites. These ads are tagged with information supplied by the advertiser, for example, who they are attempting to reach, what kind of environments they want to be in (and environments they expressly forbid, like porn sites or affiliate sites), and how much money they are willing to spend on the ad.

Once the ads are let loose, here’s the cool catch – ANYONE who sees those ads can cut and paste them, just like a link, into their own sites (providing their sites conform to the guidelines the ad explicates in its tags). The ads track their own progress, and through feeds they “talk” to their “owner” – the advertiser (or their agent/agency). These feeds report back on who has pasted the ad into what sites, how many clicks that publisher has delivered, and how much juice is left in the ad’s bank account. The ad propagates until it runs out of money, then it… disappears! If the ad is working, the advertiser can fill up the tank with more money and let it ride.

This concept of decentralizing ads (instead of “classified ads”, they’re “declassifieds“) empowers multiple agencies — not just advertisers and ad networks but publishers, too — to determine which ads propogate.

Taking this a step further to create a truly decentralized advertising network requires asking oneself the question of who is empowered to determine what goes in the square inch of real estate used by web browsers and feed readers to display ads? Not just advertisers, ad networks, and publishers — but the software writers and the actual people reading the web and feeds as well.